Looks like loans affect students well after graduation, with those with more than $50,000 in debt in the worst shape. And it's not just about the amount of money owed.
According to a study of Americans who finished college between 1990 and 2014, those who have high student debt are likely to face long-term challenges that touch on more than just their finances. Results were based on the Gallup-Purdue Index, a joint research project between the Lumina Foundation and Purdue University to explore the relationship between the lives of college graduates and their college experience, and did not factor in how much of the loans have been repaid.
"These results offer a new dimension of how college debt affects the rest of your life and it gives us more cause for concern. It's bad for all aspects of your life," noted Brandon Busteed, Gallup Education Executive Director.
To assess the respondents, the study used five elements of well-being as criteria: purpose (liking what one is doing and having the motivation to achieve goals); social (having supportive relationships in life); financial (managing economic life to boost security and reduce stress); community (liking where one lives and feeling safety and pride in the community); and physical (having enough energy and good health for everyday activities).
And for each element, a respondent may be classified as "thriving" (strong and consistent), "struggling" (moderate or inconsistent) or "suffering" (low and inconsistent).
Busteed explained that high debt can affect an individual's sense of purpose by making one choose jobs that pay more instead of those that are aligned with their interests. It may also derail someone from buying a home and settling down which delays community connection. The added stress of worrying about debt can also lead to frail physical health.
The loan amount students are taking out to finish college has been steadily climbing for years, with the average amount totaling over $33,000 compared to the $18,600 average in 2004. Around 70 percent of all college students have some form of debt and from those who participated in the study, 11 percent took out loans beyond $50,000 and 21 percent borrowed from $25,000 to $50,000.
At the moment, overall student debt for both undergraduates and graduates stands at more than $1 trillion, exceeding the total credit card debt amount of all Americans combined said the Federal Reserve. Student debt figures used in the study relied on respondent reports, and adjusted to accommodate inflation to reflect value relevant today.
